California’s Massive Wildfires Push Travelers to Seek Higher Premiums

By | January 22, 2019

California’s deadly wildfires are raising the specter of higher insurance premiums for homeowners in the state.

After “two significant years in a row of losses, I think the discussion and the debate about the environment is pretty broad and pretty public,” Michael Klein, president of personal insurance at Travelers Cos., said Tuesday in an earnings call with analysts. The New York-based company is in discussions with the state’s Department of Insurance about a filing to increase prices for homeowners in California, Klein said.

The insurer is also talking with regulators about the possibility of not renewing some business in the state. It expects to add new underwriting procedures and further pull back on its appetite for new business after starting to restrict it in 2017.

The Camp Fire that tore through California last year, destroying structures and killing more than 80 people, ranked as the most expensive natural catastrophe in 2018, with total insured losses of $12.5 billion, according to a report from Munich Re AG.

The fires led to the planned bankruptcy filing of California utility PG&E Corp. and have heightened the focus on the intensity of the state’s wildfire seasons. Travelers reported catastrophe losses, including the fires and Hurricane Michael, of $610 million before taxes in the fourth quarter, an increase of 22 percent.

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Latest Comments

  • January 23, 2019 at 3:54 pm
    Mark B says:
    If the Commissioner believes there is climate change and Travelers wants to increase rates, what better excuse then to use climate change as the reason. Commissioner is hard ... read more
  • January 23, 2019 at 3:10 pm
    Agent says:
    Travelers would be smart to exit California since they go from one disaster to another. Leave to excess Surplus Lines since that is what they deserve.
  • January 23, 2019 at 10:58 am
    Observor says:
    The commissioner is going to need to allow admitted markets some freedom on rates and coverage to make sure that consumers can still access property insurance. The other facto... read more

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